Wash Post: Catania Moving to Education Committee?

David Catania seeks education panel chairmanship

By Tim Craig

D.C. Council member David A. Catania (I-At large) is vying to become the next chairman of the city’s Education Committee, saying he wants to take his "skill set and apply it to school reform."

Catania, the second-ranking council member in seniority, said he has already begun considering how he would run the committee that has oversight over the city’s 50,000-student school system.

In the coming weeks, Council Chairman Elect Kwame Brown (D) will be deciding committee chairmanships. Catania now chairs the Health Committee.

When Mayor-elect Vincent C. Gray (D) was elected council chairman in 2006, he moved education to the Committee of the Whole, which all 13 council members sit on and which Gray chairs. Gray said that education was so important that all members should have a stake in it.

But Catania argues that education should be broken out as a stand-alone committee.

"If the last four years tell us anything, education is an overwhelmingly important subject matter, and it’s difficult for the chairman of the council to run the institution and chair the most significant subject matter in the city," Catania said. "It’s overwhelming, and we should go back to having a separate committee."

Catania said that he did not know Brown’s plans. But many council observers speculate that Brown may place another subject matter, such as economic development, in the Committee of the Whole and allow a council member to take over the Education Committee.

As a chairman, Catania is known as aggressive in oversight. At times, he’s been accused of trying to micromanage the Health Department, but his supporters note he’s been able to implement numerous reforms within the agency.

If Catania doesn’t get to chair a newly-formed Education Committee, he said, he would want to continue to chair the Health Committee.

Brown says he hasn’t decided on chairmanships yet. "I haven’t talked through anything."

Politico: Some Complexities of Health Care Exchanges

Exchanges are popular but complex
By: Jennifer Haberkorn
November 16, 2010 04:38 AM EST
How could too many choices become a problem? Ask the Massachusetts officials who put together the country’s first insurance exchange.

Consumers “felt overwhelmed” when flooded by too many options for private insurance, said Rosemarie Day, president of Day Health Strategies and former deputy director and chief operating officer of the Commonwealth Health Insurance Connector Authority – the group that put together the exchange.

At some point, she said, too many choices of health insurance – already a complicated purchase – became no better than not enough choices.

As the federal government and states start to put together the building blocks of the health care overhaul’s insurance exchanges – Orbitz- or Expedia-like Web programs with which to buy insurance – they’re trying to avoid the hiccups experienced in the only two states with similar exchanges already in place today.

“Putting up these state-based exchanges is a challenge,” Joel Ario, the Department of Health and Human Services’ director of the Office of Health Insurance Exchanges, told insurers gathered at a meeting of America’s Health Insurance Plans in Chicago last week. “It’s going to take a partnership with the states and a partnership with the insurance industry.”

Ario’s goal with the exchanges, he said, is to have them work as well for the individual and small-group markets – people who buy coverage on their own or through a small business – as the employer-based system does for large-group coverage.

The program was set up to allow states to establish exchanges that are as stringent or as relaxed as they want. In general, states are expected to find a place along the spectrum, with Utah representing the most relaxed program and Massachusetts the most rigid.

Cheryl Smith, a director at Leavitt Partners and former director of the Utah Health Exchange Office, described Utah’s program as essentially a “farmers market,” where insurers can offer their plans as farmers offer their produce at a market, with few requirements to participate.

Massachusetts’s program is more complex; it has the authority to reject insurers’ premiums bids if it finds them to be too high, a feature that’s designed to leverage the buying power of the exchange.

States have to have a system established by 2013 or the federal government will step in and set up the program. The exchanges must be ready for consumers by 2014.

The insurance exchanges are one of the most innovative and complicated pieces of the health care overhaul. But they also enjoy broad bipartisan support relative to the rest of the controversial legislation.

Illinois Insurance Director Michael McRaith said that for all the talk on Capitol Hill of repealing health reform, he thinks the exchanges are here to stay.

“The exchanges, in my view, can be differentiated from other aspects of health reform. Health insurance reform is going to be very difficult to repeal. But exchanges, until this point, have been adopted in states that are Republican,” he told AHIP on Tuesday, pointing to Massachusetts, Utah and California.
California Gov. Arnold Schwarzenegger has been one of the most prominent Republicans to support reform, and his state was the first to enact legislation on an exchange, which has yet to be established.

State officials have raised a number of worries about the new exchanges, however. They say they don’t have enough time to set up the program by 2013 and worry about whether it will control costs, among other concerns. The exchanges will also have to work with the Medicaid program to determine whether customers are eligible. All of the new responsibility comes as state budgets and Medicaid funds are shrinking.

The health reform law allows states to join together to establish regional exchanges – which could be particularly helpful in small or sparsely populated states that don’t have a large enough pool to leverage anything out of an insurer.

But many of the exchange experts at AHIP’s meeting cautioned that it would be difficult to overcome political and logistical barriers among the states.

“I think regional states are a good idea,” Smith said. But “it gets very complicated to do this across state lines.”

HHS has already moved to ease some of the states’ concerns and prove that it’s going to be flexible when it can.

In response to worries that states don’t have the time, authority or knowledge to quickly design and implement the exchanges’ information technology program, the department recently announced potentially significant grants for five states willing to put together programs that other states can use as models.

Ario said HHS is hoping states can design programs that control costs – one of the things that many critics of the health law say it didn’t do.

“We have the opportunity now, through the use of the insurance exchanges, to really test some ideas out there about ways to reform the system,” Ario said.

(c) 2010 Capitol News Company, LLC

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Wash Biz Journal: MD Council Urges That Exchange Be Government Run

Maryland’s Health Care Reform Coordinating Council recommended the state’s new health insurance market, or exchange, be a public, government-run operation with a board to oversee its operations.
But what structure the exchange should take is still a point of contention among the state’s health care leaders. Some lawmakers and health care experts prefer that the exchange take the form of a nonprofit organization to avoid political influence.
The federal health care reform law mandates that each state set up an exchange, a central place where consumers will be able to go to pick an health insurance plan.
The Exchange and Insurance Markets Workgroup, one of the six subgroups part of the council, sought input from the public about whether the insurance exchange should be a nonprofit organization or a government-run entity. The group received public comments both in favor and against a government-run exchange, but the workgroup made the case for setting up the exchange as a government entity, saying that it would be easier to regulate and coordinate with other government agencies, such as Medicaid and the Maryland Insurance Administration.
Lt. Gov. Anthony Brown and others questioned the council’s recommendations on Tuesday, arguing that a nonprofit would be less likely to be a highly politicized structure.
There was also considerable debate over who should oversee the exchange. Some suggested that someone from the business community should head up the exchange while others said a lawmaker could do the job.
That issue is still premature, but state leaders will have to come to a consensus soon about the basic structure of the exchange since it must be created by 2012.
Chuck Milligan, executive director of the Hilltop Institute in Catonsville, said the legislature will have to take action in the 2011 session about what the exchange will look like so it can be running before the federal government’s initial deadline.
The question of how the exchange’s operations will be funded lingers, too. States’ health care exchanges must be self-sustaining by 2016. In other words, they can’t be federally funded.
Also at Tuesday’s meeting, state Sen. Thomas Middleton, a Democrat, asked whether the cost to run the exchange will be factored into insurance companies’ medical loss ratio, the amount of insurers’ total revenue that goes toward actual medical costs.
The federal reform law restricts insurers’ revenues by mandating that insurance companies spend a certain amount of their premium revenue for medical services.
It’s likely that insurance companies will have to front some sort of fee to enter the exchange, since the exchange cannot be funded by the federal or state government.
The issue is whether the fees to run the exchange could be considered part of that medical services ratio or whether insurance companies would have to use its revenue after the medical loss ratio is applied to pay a fee to participate in the exchange.

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Wash Post: Catania Seeks Ed Committee Chair

Posted at 10:27 AM ET, 11/22/2010
David Catania seeks education panel chairmanship
By Tim Craig
D.C. Council member David A. Catania (I-At large) is vying to become the next chairman of the city’s Education Committee, saying he wants to take his “skill set and apply it to school reform.”
Catania, the second-ranking council member in seniority, said he has already begun considering how he would run the committee that has oversight over the city’s 50,000-student school system.
In the coming weeks, Council Chairman Elect Kwame Brown (D) will be deciding committee chairmanships. Catania now chairs the Health Committee. When Mayor-elect Vincent C. Gray (D) was elected council chairman in 2006, he moved education to the Committee of the Whole, which all 13 council members sit on and which Gray chairs. Gray said that education was so important that all members should have a stake in it.
But Catania argues that education should be broken out as a stand-alone committee.

“If the last four years tell us anything, education is an overwhelmingly important subject matter, and it’s difficult for the chairman of the council to run the institution and chair the most significant subject matter in the city,” Catania said. “It’s overwhelming, and we should go back to having a separate committee.”
Catania said that he did not know Brown’s plans. But many council observers speculate that Brown may place another subject matter, such as economic development, in the Committee of the Whole and allow a council member to take over the Education Committee.
As a chairman, Catania is known as aggressive in oversight. At times, he’s been accused of trying to micromanage the Health Department, but his supporters note he’s been able to implement numerous reforms within the agency.
If Catania doesn’t get to chair a newly-formed Education Committee, he said, he would want to continue to chair the Health Committee.
Brown says he hasn’t decided on chairmanships yet. “I haven’t talked through anything.”
By Tim Craig | November 22, 2010; 10:27 AM ET

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Wash Post: All Budget Options on the Table

District budget fix might increase taxes
By Tim Craig and Nikita Stewart
Washington Post Staff Writers
Tuesday, November 23, 2010; B06
D.C. Mayor-elect Vincent C. Gray (D) said Monday he might propose higher property, income or sales taxes to close a budget shortfall expected to exceed $500 million in the next two years.
Gray’s comments, made during a television address designed to communicate the magnitude of the city’s financial challenges, were his most direct so far about what sacrifices he may ask from residents after he takes office Jan. 2.
“It’s your money we’re dealing with – you deserve honest talk about what’s going on with it,” Gray said.
Gray noted that three-fourths of the city’s $5.3 billion operating budget are “fixed costs” such as salaries, federally mandated programs, Metro payments and interest on debt. And with 80 percent of District revenue coming from property, sales or income tax revenue, Gray said it is not possible “to raise significant revenue” unless he targets “one or more major tax categories.”
“Let me be clear: All options will be on the table if we’re going to fix this gap in our operating budget,” Gray said. “But let me be equally clear about this: I know that many District families and businesses are hurting from the recession, as much as or even more than the District government. So I will not ask District residents to pay one single dollar in tax increases without first assuring them that we have scrubbed the budget and found every last dollar in savings.”
Gray and the council will begin tackling the first part of the shortfall next month, when they begin work on a plan by outgoing Mayor Adrian M. Fenty (D) to eliminate a $185 million gap in the current year’s budget gap. The release of the much-anticipated gap-closing plan was delayed Monday evening after a back-and-forth between the Fenty administration and the Office of the Chief Financial Officer.
Chief Financial Officer Natwar M. Gandhi wanted to make sure some of Fenty’s cost-savings reductions were adding up. He sent the plan back with questions, and Fenty’s budget team was working on the answers Monday night, according to spokesmen in both offices. Gray said the council hoped to vote on Fenty’s plan before Christmas.
Once he is sworn in as mayor in January, Gray has said his first budget will have to find ways to cover an additional $345 million gap
in fiscal 2012, according to Eric Goulet, the council budget director.

Gray said the city was near its self-imposed debt ceiling – 12 percent of the budget – for spending on capital projects.
To begin addressing the problem, Gray said he was freezing all capital projects that were not yet underway while “a blue-ribbon panel of experts” reviewed which were necessary.
“It’s time we distinguish between the projects we need versus the projects that we want,” Gray said.
But Gray probably will be under considerable pressure in the coming weeks to spare some social service programs from deep budget cuts.
Minutes after Gray spoke, advocates for foster children gathered outside the John A. Wilson Building to demonstrate against recent budget cuts. Anniglo Boone – director of the Consortium for Child Welfare, which advocates in support of at-risk children – said there already had been more than $30 million in cuts to foster-care programs in the past year.
“Our hope is we can get some cuts repealed, because these are cuts that go directly for kids in foster care,” Boone said. “Social workers will clearly be overloaded and caseloads will spike.”

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Mayor-Elect Gray’s Statement on the Worsening Budget Gap

PRESS RELEASE
Council of the District of Columbia
Office of Chairman Vincent C. Gray
The John A. Wilson Building
1350 Pennsylvania Avenue, NW
Washington, D.C. 20004
For Immediate Release:
Contact: Doxie A. McCoy
November 22, 2010
202-724-8032

202-664-9862-cell

dmccoy@dccouncil.us

Gray Gives Budget Message Outlining Daunting Challenges Facing the District Calls for Public Participation at November 30th Hearing

Washington, D.C. – Saying he wanted to “speak to the people of the District, honestly, directly, and transparently,” Mayor-Elect and Council Chairman Vince Gray today delivered a State of the District’s Budget and Finances Message. Gray outlined the “daunting financial challenges” the city faces with a $188 million budget deficit in the operating budget for fiscal year 2011, which began October 1st. He also highlighted an additional structural gap of $345 million in fiscal year 2012, which begins next October.

Mayor-Elect Gray also announced a Council timeline for considering gap-closing legislation. He will hold a public hearing on November 30th, the first Council vote on December 7th, and the final vote on December 21 at the Council’s final legislative meeting of the year.

“Despite this very tight timeline, I will do everything possible to ensure that this budget process is as transparent as possible,” the Mayor-Elect said. “I encourage members of the public to come to the hearing and give us ideas on how to solve the budget gap we are facing; please let it be more than don’t cut this or that, without offering solutions.”

In his message, Gray proposed setting aside a $50 million cash reserve to use for unforeseen spending and further revenue reductions. This would avert the District from having to take from the congressionally mandated rainy day fund, which must be replenished within two years. At Gray’s urging, the Council established a similar reserve, which proved very usual, during fiscal year 2009.

The Mayor-Elect also called for a freeze on all capital (construction) projects not yet underway. He will establish a blue ribbon panel of experts to make recommendations on prioritizing capital needs.

Gray said he is well aware that too many District families and businesses are hurting from the recession, so while tax increases will be on the table with all other options for raising money, he will not ask that they “pay one single dollar in tax increases without first assuring them that we have scrubbed the budget and found every last dollar in savings first.”

“Simply put, as is true with any family or business facing tough times, it’s time we distinguished between projects we need versus the projects that we want…The decisions we are about to make are tough. However, as your next Mayor, I commit to addressing these challenges head on. I will not use short-sighted budget gimmicks to push the problem off until later,” Gray said.

“Many of these decisions are going to be painful..everyone is going to have to take a hit and share in the sacrifice. That’s the only way we’re going to be able to keep our city on sound financial footing in both the short and long term. That’s why we need your help.
“As we enter this week of Thanksgiving, allow me to offer my thanks to the people of the District of Columbia who have proven time and again their resilience and willingness to sacrifice to help create a great city.I know that everyone will step up and do their share once again.It is that spirit which truly makes us One City.”

Mayor-Elect Gray thanked Chairman-Elect Kwame Brown, other Councilmembers, CFO Natwar Gandhi, and Alice Rivlin, Co-Chair of Gray’s Budget and Fiscal Responsibility Transition Committee, for their support in joining him this morning. Gray’s entire statement is attached and posted at
http://www.dccouncil.us.

###

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Wash Post: Mayor Elect Gray and the Unions

A debt Gray has to deal with
By Mike DeBonis
Washington Post Staff Writer
Thursday, November 18, 2010; B01
After three years on the political margins, organized labor has a seat at the table. It did not come easily.
Unions delivered a barrage of phone calls, direct mail and door-to-door canvassers to help D.C. Council Chairman Vincent C. Gray complete a stunning upset of Mayor Adrian M. Fenty in this year’s city elections. But even that wasn’t quite enough to earn labor a top role in Gray’s transition. A day after Gray introduced his 16-member transition team – which included a former mayor, a nationally recognized budget expert, a philanthropist and a former university president – Joslyn N. Williams, president of Metropolitan Washington Council, AFL-CIO, said he was “concerned” that no labor leaders were among the senior members of Gray’s transition team.
Now, Gray has quietly added Williams to co-chair the economic development team, joining D.C. Chamber of Commerce chief executive Barbara Lang and former George Washington University president Stephen Joel Trachtenberg. The appointment reflects the balance Gray has tried to strike between acknowledging the contributions of unions to his election and facing up to the governing decisions that await him in the months ahead. On one hand, unions gave his campaign a volunteer base that helped offset Fenty’s fundraising advantage. On the other, as mayor, he must tackle a budget deficit that could balloon to $500 million before his four-year term is up. Williams said that he is now “satisfied that everybody’s in the room” but that he still expects broader labor participation in the Gray transition and administration. “I want to make sure we have input in every one of the groups,” he said.
But it is unlikely that every labor demand will be so easily met. Leaders of public employee unions, in particular, are hoping for a sympathetic ear; many city employees, including police officers and firefighters, have been working under expired contracts and are hoping for a more responsive negotiating partner.
Gray said unions will not get special treatment. “Contrary to any popular belief, there were no promises of anything,” he said of organized labor’s support.
About a year ago, the leaders of the city’s largest public employee unions made the first of several private visits to Gray. They felt marginalized by Fenty, who was elected without broad union support in 2006, doubted labor’s political clout in the city and had raised millions for his reelection bid. Four men – Kristopher Baumann of the Fraternal Order of Police; George Parker of the Washington Teachers’ Union; Ray Sneed of the International Association of Fire Fighters; and Geo T. Johnson of District Council 20 of the American Federation of State, County and Municipal Employees – put the hard sell on Gray. They wanted him to give up a sure thing – reelection as council chairman – and run against Fenty in the Democratic primary only 10 months away. Johnson took to calling the group the “gang of four.” In March, their wish became reality.
Gray’s victory has union leaders enjoying a new appreciation of their political relevance.
“The common wisdom going into this thing was, the mayor has all this money, there’s no way you can beat him – that was proved wrong,” said John Boardman, executive secretary-treasurer of Unite Here Local 25, which represents 8,000 city hotel and restaurant workers. “We can turn someone out who we think is not serving the interests of all the people.” Now Gray has the job of reconciling an ailing city budget with the wishes of the newly empowered labor community. His strongest supporters – the public employee unions – place a premium on preserving members’ jobs, hundreds of which have been cut in recent years. And Fenty supporters fear that Gray won’t have the stomach to fire bad employees because he is beholden to unions.
“I think they’ve got a chokehold on the chairman,” said Attorney General Peter Nickles, a Fenty confidant. “I fear for the return of a culture of complacency. . . . It’s the question of what people think every day, every hour, every minute what they can get away with.”
Johnson and others said labor is merely looking for some respect and recognition.
“The workers are not above making some sacrifices, but what we are universally opposed to are unilateral decisions,” he said. “I’m open to sit down and explore how we can save. . . . Anything that would keep people’s jobs.”
Gray said that he shares labor’s goal of saving as many jobs as possible and that he is optimistic that union leaders will be open to other concessions. “I think you’ve got to sit down and say, ‘Look, here’s the reality of our financial situation.’ You try to do what you can to save jobs, first and foremost,” he said. “Giving raises is just not something that’s even an option at this point.”
Gray, however, dismissed the use of employee furloughs, which other jurisdictions have turned to in budget crunches, as a measure that “doesn’t solve the long-term problem.”
Labor leaders have political imperatives apart from jobs. Sneed and Baumann have clashed with the fire and police chiefs, respectively, and have pressed for management changes. Parker, who finds his union amid a national battle over education reform, wants modifications to a controversial teacher evaluation system.
Parker and other union leaders insist that they did not buy Gray’s absolute loyalty with their political support. “They are way off track if they think Vince Gray is going to be controlled by the Washington Teachers’ Union,” Parker said. “If you talk to him for five minutes, it’s very clear. He listens to all sides, but Vince has his own mind.”
The Fenty factor
Washington is devoid of the manufacturing base that made such cities as Baltimore and Philadelphia labor strongholds, but the workers in the city’s core industries – construction, hospitality and government – have maintained some local influence. Although labor leaders have rarely been kingmakers in the 36 years since the city gained home rule, virtually every mayor – until Fenty – paid them some deference.
Joslyn Williams remarked on the contrast between Fenty and his predecessor, Anthony A. Williams, who met with labor leaders nearly once a month. Fenty met with the AFL-CIO’s Washington area council once during his tenure, Joslyn Williams said. That was weeks after his inauguration, when Fenty was trying to gain support for his takeover of the city schools. Some labor leaders rebuffed Fenty, and he never sought their support again, the AFL-CIO official said.
A “broad swath of insult” is what Fenty delivered, Boardman said. “Not only could you not work with him, he wasn’t interested in seeking any counsel from anyone,” Boardman said.
Nickles said that union leaders overstate the issue and that he had met with them several times on a variety of issues. But he said there were deep differences with public employee unions over the pace and scale of Fenty’s reformist agenda, which sought the swift removal of poorly performing employees.
There are about 35,200 city employees, according to the city personnel agency; more than 31,400 belong to unions that are often at odds with Fenty.

Parker had become the face of the opposition to Schools Chancellor Michelle A. Rhee’s reform initiatives; the administration presented police and fire employees with contract proposals that offered no pay raises; and workplace grievances languished because the appeals board wasn’t hearing cases. In late March, when Gray decided he’d enter the race after months of speculation, union support fell quickly in line. “Sometimes, when there are causes we support, it’s tough getting our members to put their feet on the ground,” Parker said. “It was not very tough this time around.” Union foot soldiers
During the two months before the Sept. 14 primary election, Chuck Brown, 46, joined a dozen or more of his fellow members of the International Brotherhood of Electrical Workers Local 26 and fanned out across the city, dropping campaign literature at the doors of residents in wards 4, 5, and 7.

“We knew that Vincent Gray supports organized labor; Adrian Fenty doesn’t,” said Brown, a resident of Washington Highlands in Southeast. “That’s the bread and butter right there.”
The unions made their difference with manpower. Fenty’s $5 million war chest financed scores of paid campaign workers. But motivated union members lent the late-forming Gray campaign an instant field operation. Meanwhile, what little union support Fenty had in 2006 was not with him in 2010. Putting a dollar amount on labor’s contributions is not simple. Two labor-related political action committees funded anti-Fenty mail pieces and phone calls that went to the public at large. One of them, run by the local AFL-CIO council, spent about $400,000, Williams said. Johnson estimates that the AFSCME council spent about $150,000.
But unions are not required to report what they spend to contact their members, and that effort, labor leaders say, was extensive and unprecedented. And local organizations were joined by bigger players from regional and national unions.
“It was a great compensation for not having money,” Gray said of the union volunteers.
Brown said he had become frustrated watching city construction projects draw workers from Maryland, Pennsylvania, even New York, while hundreds of his union brothers from the city were left unemployed. “That’s what got me involved,” he said.
His involvement didn’t end with the primary. Brown and several of his union brothers have shown up at Gray’s town hall meetings, pressing him on enforcing the First Source Agreement Program, which requires that contractors who receive city financing or tax breaks provide employee opportunities for District residents.
“Only thing we wanted was that,” Brown said.

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

POLITICO: Feedback From MA & UT on Exchanges

Exchanges are popular but complex
By: Jennifer Haberkorn
November 16, 2010 04:38 AM EST
How could too many choices become a problem? Ask the Massachusetts officials who put together the country’s first insurance exchange.

Consumers “felt overwhelmed” when flooded by too many options for private insurance, said Rosemarie Day, president of Day Health Strategies and former deputy director and chief operating officer of the Commonwealth Health Insurance Connector Authority – the group that put together the exchange.

At some point, she said, too many choices of health insurance – already a complicated purchase – became no better than not enough choices.

As the federal government and states start to put together the building blocks of the health care overhaul’s insurance exchanges – Orbitz- or Expedia-like Web programs with which to buy insurance – they’re trying to avoid the hiccups experienced in the only two states with similar exchanges already in place today.

“Putting up these state-based exchanges is a challenge,” Joel Ario, the Department of Health and Human Services’ director of the Office of Health Insurance Exchanges, told insurers gathered at a meeting of America’s Health Insurance Plans in Chicago last week. “It’s going to take a partnership with the states and a partnership with the insurance industry.”

Ario’s goal with the exchanges, he said, is to have them work as well for the individual and small-group markets – people who buy coverage on their own or through a small business – as the employer-based system does for large-group coverage.

The program was set up to allow states to establish exchanges that are as stringent or as relaxed as they want. In general, states are expected to find a place along the spectrum, with Utah representing the most relaxed program and Massachusetts the most rigid.

Cheryl Smith, a director at Leavitt Partners and former director of the Utah Health Exchange Office, described Utah’s program as essentially a “farmers market,” where insurers can offer their plans as farmers offer their produce at a market, with few requirements to participate.

Massachusetts’s program is more complex; it has the authority to reject insurers’ premiums bids if it finds them to be too high, a feature that’s designed to leverage the buying power of the exchange.

States have to have a system established by 2013 or the federal government will step in and set up the program. The exchanges must be ready for consumers by 2014.

The insurance exchanges are one of the most innovative and complicated pieces of the health care overhaul. But they also enjoy broad bipartisan support relative to the rest of the controversial legislation.

Illinois Insurance Director Michael McRaith said that for all the talk on Capitol Hill of repealing health reform, he thinks the exchanges are here to stay.

“The exchanges, in my view, can be differentiated from other aspects of health reform. Health insurance reform is going to be very difficult to repeal. But exchanges, until this point, have been adopted in states that are Republican,” he told AHIP on Tuesday, pointing to Massachusetts, Utah and California.
California Gov. Arnold Schwarzenegger has been one of the most prominent Republicans to support reform, and his state was the first to enact legislation on an exchange, which has yet to be established.

State officials have raised a number of worries about the new exchanges, however. They say they don’t have enough time to set up the program by 2013 and worry about whether it will control costs, among other concerns. The exchanges will also have to work with the Medicaid program to determine whether customers are eligible. All of the new responsibility comes as state budgets and Medicaid funds are shrinking.

The health reform law allows states to join together to establish regional exchanges – which could be particularly helpful in small or sparsely populated states that don’t have a large enough pool to leverage anything out of an insurer.

But many of the exchange experts at AHIP’s meeting cautioned that it would be difficult to overcome political and logistical barriers among the states.

“I think regional states are a good idea,” Smith said. But “it gets very complicated to do this across state lines.”

HHS has already moved to ease some of the states’ concerns and prove that it’s going to be flexible when it can.

In response to worries that states don’t have the time, authority or knowledge to quickly design and implement the exchanges’ information technology program, the department recently announced potentially significant grants for five states willing to put together programs that other states can use as models.

Ario said HHS is hoping states can design programs that control costs – one of the things that many critics of the health law say it didn’t do.

“We have the opportunity now, through the use of the insurance exchanges, to really test some ideas out there about ways to reform the system,” Ario said.

(c) 2010 Capitol News Company, LLC

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Consumer Reps See Progress in Latest Draft of NAIC Model Exchange Act

CQ HEALTHBEAT NEWS
Nov. 12, 2010 – 5:22 p.m.

Consumer Reps See Progress in Latest Draft of NAIC Model Exchange Act

By John Reichard, CQ HealthBeat Editor

What should be done about state laws that require health plans to offer benefits above and beyond the “essential” ones that must be offered under the health law in insurance exchanges starting in 2014?

The health law (PL 111-148, 111-152) says that states can require plans offered in exchanges to offer added benefits, but only if the state involved picks up the additional costs involved.

The latest draft of a model exchange act under development by the National Association of Insurance Commissioners (NAIC) clarifies how those costs should be determined — and does so in a way that pleased a large bloc of consumer representatives involved in the NAIC drafting process.

Adopted Nov. 11, the draft clarifies that the costs of the added benefits should be thought of as “net costs,” a step urged by the consumer reps in a Nov. 8 letter to the NAIC panel that was drafting the model act. States are expected to begin writing legislation next year to create the exchanges required by the health law.

While the health law “does not specify whether the costs would be net or gross costs, we believe that the states should evaluate net costs,” says the letter. “Some benefits, like prescription drugs, add to the premium, but the overall cost is offset significantly by reduction in more expensive inpatient care.” Gross costs would be the total costs involved to provide the service. But net costs would be the final cost after subtracting the savings incurred by providing the service.

The Nov. 11 language says in a drafting note that states should either drop requirements for added benefits on plans offered in the exchanges or “enact legislation establishing a mechanism for evaluating and defraying the costs of any additional benefits.”

If they choose the latter course, “it is recommended that the cost of the additional benefits be measured on a ‘net cost’ basis to the extent permitted by federal law, considering both the costs of the service, and any associated savings,” the Nov. 11 language says.

That test presumably would make it easier for states to pay for added benefits and to require more generous benefit packages.

The bloc of consumer reps also had urged that the model act include language clarifying that members of boards overseeing exchanges should not have a conflict of interest. That language was not included.

Consumer reps are worried that insurers or others with financial ties to the industry will be named to the boards, to the detriment of exchange customers.

The panel is expected to consider comments on the Nov. 11 draft in a meeting on Nov. 15. At that point it will make any additional changes to the language, and forward it to a larger NAIC committee that will vote on the model act on Nov. 22. After that, the full NAIC will vote on the language. No date has been set for that vote.

Source: CQ Online News

© 2010 CQ Roll Call All Rights Reserved.

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

DC-Area Hospitals Push Ahead with Reforms

D.C.-area hospitals will implement reforms, regardless of GOP plans Date: Wednesday, November 10, 2010, 3:21pm EST
The newly empowered Republican Party, which gained control of the House of Representatives Nov. 2, is promising a multifaceted effort to repeal the new health care law or at least undermine its implementation.
But the executives who control the billions of dollars spent providing or paying for health care in the Washington area say the election won’t change much.
Big initiatives under way at local hospitals are driven by long-term economic and market trends that won’t go away even if the legislation does: an aging population, industry consolidation and economic pressures that threaten their business models.
When Silver Spring’s Holy Cross Hospital
trustees meet Nov. 13 for an annual strategy retreat, the major topics won’t be any different, said CEO Kevin Sexton.
The meeting will revolve around the rapidly growing demand for medical care, Sexton said, and even if the controversial “individual mandate” requiring all Americans to buy insurance is repealed, Holy Cross will still want to build a new hospital and a new clinic.
“In 2011, the first baby boomers get Medicare,” he said. “And the number of people over the next 10 years and 20 years who age into Medicare and then age into higher levels of expenses, that’s going to happen whatever we do. That’s still more important in my mind, when you’re thinking about the future of hospitals, than anything else.”
Before President Barack Obama was elected, Columbia, Md.-based MedStar Health
began a major effort to streamline its nine-hospital, $3.8 billion system to make care more uniform across locations. MedStar also is investing heavily in information technology and trying to deliver more care at outpatient clinics and doctors’ offices, which have lower overhead. The new law provides incentives for those efforts and creates Medicare pilot projects in the same vein. But MedStar’s work would continue even without the law. Becoming more efficient is a matter of survival for hospitals and crucial for the national economy, said CEO Ken Samet.
“This is something that costs 16 percent of our GDP and growing,” he said. “That shouldn’t be punted back simply on the back of short-term election results.”
Election Day occurred after most employers had established their health insurance plans for 2011, so they don’t have to worry about the impact of any changes in the law until next fall, said Melissa Randolph, a benefits consultant and broker for Willis of Maryland in Rockville.
She believes the major changes envisioned in health care reform, set to take effect in 2014, may not happen. In the meantime, Randolph advises clients to stay in the loop and be conservative with insurance budgeting. The hospital consolidation trend, however, is not likely to end. Major insurance companies and Medicare will continue to squeeze doctor payments, making a freestanding practice more challenging, and independent hospitals will continue to struggle to maintain their market share.
Inova Health System
will continue to react to the law as its written, said CEO Knox Singleton in a prepared statement.
“The shift in control of the House of Representatives may impact how the legislation is implemented, but it’s impossible to know with any certainty at this point exactly how,” he wrote. “As a result, it is not realistic for a health care provider to cease or shift the preparation process that would otherwise be required.”
John Miller, executive director of the Mid-Atlantic Business Group on Health, said industry experts and his own members – large employers concerned about health care costs – are not adjusting in light of the election results. They simply don’t think of repeal, or even piecemeal chipping away, as anything more than rhetoric.
“Most people who are not speaking for the press, quote, unquote, would agree that’s not a terribly likely thing to happen,” Miller said.

Read more: D.C.-area hospitals will implement reforms, regardless of GOP plans | Washington Business Journal

Kevin S. Wrege, Esq.
President
PULSE Issues & Advocacy LLC
4410 Massachusetts Ave., NW, #150
Washington, DC 20016
Office: 202-625-1787
Mobile: 202-253-4929

Follow

Get every new post delivered to your Inbox.